[News Inside] MS Savior in Crisis... Achieving '2 Trillion Dollar' Milestone in 7 Years of Tenure

Satya Nadella, Microsoft (MS) CEO

▲Satya Nadella, CEO of Microsoft (MS) [Image source=Yonhap News]

[Asia Economy Reporter Kwon Jaehee] Microsoft (MS), the world's largest software company, has surpassed a market capitalization of $2 trillion. This achievement came just 2 years and 2 months after surpassing $1 trillion in April 2019.

Once called an "old dinosaur," MS was able to reinvent itself as an icon of innovation thanks to the leadership of Satya Nadella, MS's Chief Executive Officer (CEO).

Bloomberg compared Nadella's leadership, which led to MS's revival, to the Renaissance that revived Western Europe in the 16th century, coining the term "Nadellaissance."

[Image source=Yonhap News]

◆MS in Crisis...The Fall of a Dinosaur= Before Nadella became CEO, MS was on a steady decline. In the early 2010s, MS failed to read the IT industry's shift from PCs to mobile, and was regarded as a "has-been company." Former CEO Steve Ballmer made a final gamble by acquiring Nokia's mobile phone division for $7.2 billion, but after two years, it was put back on the market, failing to recover. MS was not part of the "FAANG" group (Facebook, Apple, Amazon, Netflix, Google), which represents the leading IT companies. The fact that MS's stock price fell 43% during Ballmer's 14-year tenure clearly shows the company's downward trajectory at the time.

When Ballmer took responsibility for the poor management and announced his resignation, MS's board began searching for a new CEO. Initially, external candidates were considered, with the logic that an industry-recognized expert should be brought in. However, founder Bill Gates strongly insisted that an internal candidate who thoroughly understood MS's management philosophy and strengths and weaknesses should be appointed CEO.

Thus, the MS board ultimately selected Nadella as CEO, and in February 2014, Nadella became MS's third CEO. Nadella's appointment was widely seen as a true generational change for MS, as founder Gates and second CEO Ballmer were considered first-generation figures from MS's early days.

[Image source=AP Yonhap News]

◆Rescuer Nadella...Turning MS into an Icon of Innovation= Upon taking office, Nadella immediately pursued a "cloud-first" strategy. He boldly abandoned the already saturated mobile market and decided to concentrate all efforts on the cloud business, which was expected to be the next "blue ocean" after mobile.

Bloomberg stated, "Since Nadella joined as CEO, MS has successfully transformed its business model from PC operating systems to cloud, artificial intelligence (AI), and mobile computing."

CNBC also analyzed that "under Satya Nadella's leadership, MS has transformed into a 'young company.'"

Nadella's "focus and concentration" strategy began to show results within three years of his appointment. MS ranked second in the cloud sector behind Amazon and first in the software sector. Market capitalization also rose more than 60% after his appointment, surpassing $510 billion in January 2017.

Nadella also contributed to making MS the world's top company by promoting coexistence with the industry through "openness and sharing." This was a strategy unimaginable during the first-generation era of MS under Bill Gates and Ballmer, whose goal was to eliminate competitors from the market to monopolize it.

However, Nadella was different. Early in his tenure, he made Office apps including Word and Excel available on Apple iOS and Google Android, and unlike previous versions, offered free updates to Windows 10, fostering a cooperative relationship with the software industry through an open approach. MS announced that the newly unveiled Windows 11 on the 24th (local time) also supports apps running on Google Android. Thanks to this, unlike other "IT giants" such as Amazon, Apple, Facebook, and Google, which face strong antitrust pressure from regulators, MS has not undergone significant antitrust investigations since Nadella took office, CNBC reported.

[Image source=AP Yonhap News]

◆Who is Nadella? = Nadella was born in 1968 in Hyderabad, India, and earned a bachelor's degree in electrical engineering from Manipal Institute of Technology affiliated with Mangalore University in India. Later, he went to the United States for further studies, earning a master's degree in computer science from the University of Wisconsin-Milwaukee and an MBA from the University of Chicago.

After graduating, he briefly worked at Sun Microsystems before joining MS in 1992. Initially, he worked in the Windows NT development department, and in 2001, he became the development lead for the Business Solutions division led by then-CEO Steve Ballmer. In 2006, he was promoted to general manager of this division, and in 2008, he was assigned to the search advertising department, successfully establishing the Bing search engine in the market. In 2011, he moved to the Enterprise Server division and became senior vice president in charge of the Enterprise & Cloud division, which integrated the enterprise and cloud businesses.

He distinguished himself while leading the Enterprise & Cloud division. The cloud service "Azure," which is now MS's core business, took shape under his leadership. In 2012, the Enterprise & Cloud division he led surpassed the revenue of the traditional core Windows division.

During his tenure, MS's stock price surged more than 600%.

Nadella was also selected as one of the world's 100 most influential business leaders by Forbes.

He has experienced both MS's decline and revival. Knowing that even a dinosaur can collapse at any time, he continues to seek innovation and change.

This is why his statement, "You cannot survive if you do not try something new," is being reexamined.